Is $40,000 the right threshold for e-invoices?

A draft decree by Vietnam’s Ministry of Finance proposes requiring household businesses with annual revenue of at least 1 billion VND (approx. USD 40,000) to issue e-invoices. These invoices must carry a tax authority code or be generated through a cash register system connected to tax agencies, as outlined in Decree 70/2025.

According to the Vietnam Chamber of Commerce and Industry (VCCI), this rule aims to promote tax transparency and prevent fraud.

However, VCCI argues that the 1 billion VND revenue threshold may be inconsistent with existing tax calculation benchmarks, which are currently set at 3 billion VND and 50 billion VND.

They note that 1 billion VND is only modestly above the current tax-exempt level-just 500 million VND more-and that many businesses in this range still face limited financial and technological capacity.

Survey highlights challenges

A VCCI survey conducted in June 2025 revealed persistent difficulties among household businesses earning over 1 billion VND.

In rural areas, 32% reported lacking funds to adopt e-invoicing systems, while 77% cited poor digital skills. In urban areas, 23% lacked capital, and 67% struggled with technology adoption.

Calls to raise the threshold to 3 billion VND

VCCI supports the use of tax-coded e-invoices but urges policymakers to design the rollout in a way that doesn’t overburden smaller businesses.

They recommend increasing the threshold to 3 billion VND (approx. USD 120,000), which aligns with the point at which profit-based tax calculation begins.

For businesses below that threshold, VCCI suggests enhancing tax monitoring using alternative data sources instead of requiring universal e-invoice compliance.

A case for keeping the 1 billion VND level

Dr. Nguyen Ngoc Tu, a lecturer at Hanoi University of Business and Technology, told VietNamNet that the draft essentially reiterates existing regulations in Decree 70/2025 to ensure consistency.

He believes the 1 billion VND threshold is sensible. The amount, he says, is not large, especially considering current tax administration capacity.

Among the 5.2 million household businesses nationwide, only around 37,000-less than 1%-report annual revenue over 1 billion VND. Dr. Tu emphasized that Vietnam’s broader tax strategy aims to eventually apply e-invoicing to all businesses, even those earning under 1 billion VND, to support digital transformation and transparency.

Raising the threshold may shrink e-invoice coverage

Dr. Tu warns that increasing the threshold to 3 billion VND could unintentionally exempt nearly all household businesses from e-invoicing. This would likely expand the informal, undocumented economy and reduce tax compliance, harming other sectors in the process.

Instead, he advocates retaining the current threshold of 1 billion VND while gradually introducing e-invoices to even smaller businesses over time.

Tax professionals flag inconsistencies

Nguyen Ngoc Tinh, Vice President of the Ho Chi Minh City Association of Tax Consultants and Agents, noted that the draft's second version applies only the direct tax method based on revenue.

This method mandates the use of sales invoices, not value-added tax (VAT) invoices.

Under the 2024 VAT Law, household businesses earning between 500 million and 1 billion VND aren't required to issue e-invoices. However, businesses earning over 1 billion VND must issue them.

This creates a grey zone: how can VAT obligations be assessed fairly if a large segment isn’t issuing invoices?

According to the VAT Law, revenue used for tax calculation includes all payments listed on the invoice, including surcharges and extra fees retained by the business.

For businesses earning below 500 million VND-which are exempt from VAT-the draft states that tax declarations must be submitted no later than the 30th day of the first month in the following quarter. Yet it remains unclear which documents will be used to verify revenue in this group, Tinh argued.

Nguyen Le